The fate of Enron Corporations proposed joint venture with Gujarat Gas Company limited (GGCL) for setting up LNG terminals hangs in balance owing to the expiry of the MoU between the two parties and the takeover of GCCL by British Gas last month.
British Gas, which competes again Enron internationally for supplying natural gas, is likely to decide on the issue when the GGCL board meets later this month. But, sources close to the deal say that the MoU is unlikely to be revived in its present form.
As per the terms of the MoU, Enron and Gujarat Gas were to enter into three 50:50 joint ventures for importing and transporting LNG and for setting up a power plant.
Also Read
Sources close to British Gas and Enron said there was little prospect of the two global oil and gas giants co-operating in the country.
Further, Enron has already announced major plans for LNG supply on its own in India.
The LNG terminal which was expected to be operational by 2001 was to have come up at Amreli, Saurashtra, for which a joint venture was originally envisaged.
However, under the MoU the transportation of gas was to be undertaken by Enron itself from its gas fields in the Middle-east.
Sources in British Gas said the MoU had lapsed in September itself, but no decision could be taken then as the open offer for Gujarat Gas had not yet closed. Under the takeover code it is not possible to make such a decision till the closing of the offer, sources in British Gas added.
The open offer was announced by British Gas Asia Pacific, consequent to the acquisition of a 45 per cent stake from GGCL promoters - the Arvind Mafatlal group, Gujarat government promoted GIIC and Hindustan Oil Exploration - beating Enron among others.
Enron did not respond to a faxed questionnaire sent by Business Standard.
Enron, which is setting up a 2184 mw power project at Dabhol in Maharashtra, plans to import five million tonnes of LNG to Hazira and then transport it to the project site via pipelines where a regassification plant will be set up.
Since the Dabhol project requires only 2.5 million tonne of LNG the balance will be supplied to other Indian consumers. For this, it plans to construct pipelines to different parts of Maharashtra and Gujarat. Later on they may be extended to other regions depending on the demand for LNG.
In a recent presentation by its CEO, Rebecca Mark, to the Union government, Enron stated that it is in a position to lay cross country pipelines from Indonesia and Bangladesh to India. It is also keen on acquiring a 26 per cent stake in the consortium of PSUs set up to build a network of pipelines in India.